Inspired Entertainment’s Q1 financials were posted this week, showing an increase in revenue despite disruption from the ongoing COVID-19 pandemic.
Q1 total revenue increased to $52.3m from $33.7m year-on-year, primarily driven by $27.4m in revenue from the recently acquired Novomatic Gaming Technology Group. The increase was significantly offset by a lag in sales and temporary suspension of the company’s land-based business due to the ongoing COVID-19 global pandemic and a fall in revenue in the UK LBO market.
Adjusted EBITDA in Q1 decreased to $10.1mn, from $13.7m. The impact of the COVID-19 global pandemic was greater on adjusted EBITDA than it was on revenue due to the abrupt nature of the closures which, said the firm, caused it to incur significant costs which had no associated revenues.
Executive Chairman Lorne Weil noted: “The year got off to a strong start, building on the momentum from outstanding organic growth, increased profitability across our businesses and better-than-expected initial results from our transformative acquisition which we realized in the fourth quarter of 2019.
“However, the COVID-19 global pandemic resulted in the temporary closure of the land-based retail businesses of our customers with continuation of many of the associated expenses, which had a material negative impact on our first quarter results.”
A breakdown of Inspired’s key figures shows that SBG Service Revenue declined by $7.5m, or 35.8%, during Q1, of which approximately $4.4m of the decline is estimated to have resulted from the UK Triennial implementation and circa $2.1m from COVID-19 Closures.
SBG Hardware Revenue increased by $0.5m, or 16.4%, driven by its Valor cabinet sales in North America of $2.3m. Virtual sports revenue decreased by $1m, or 10.1%, primarily driven by a $1m decline in retail recurring revenue due to COVID-19 closures.
A $0.5m increase in recurring revenue from scheduled online virtuals and a $0.4m increase in recurring revenue from interactive were mostly offset by a $0.7m one-time adjustment for a payment of historically under-reported revenue share in the prior year.